We use cookies to customise content for your subscription and for analytics.If you continue to browse Lexology, we will assume that you are happy to receive all our cookies. For further information please read our Cookie Policy.

The GCC railway network

Transborder rail transport in the Arabian Peninsula dates back to the early 20th century and the Hejaz Railway which linked Damascus in Syria to Medina in Saudi Arabia. Its principal purpose was to transport pilgrims between Constantinople, the capital of the former Ottoman Empire, and the Hejaz in Arabia, the site of the holy city of Mecca, whilst also shortening travel time for military forces. Over a century following the closure of the Hejaz Railway, the Gulf Cooperation Council (GCC) is now embarking on one of the largest modern cross-border rail networks in the world.

Project overview

Economic development and rapid population increase demand a shift from road transport towards a more developed national and regional transportation system in the Gulf.

The GCC Railway, once fully operating, is intended to connect all six GCC nations with track running through each of the following key cities: Kuwait City, Dammam in the Kingdom of Saudi Arabia (KSA), Abu Dhabi and Al Ain in the United Arab Emirates (UAE), Doha in the State of Qatar, Muscat in the Sultanate of Oman, and Manama in the Kingdom of Bahrain.

The initial project feasibility study was approved by the GCC ministers in October 2008, and thereafter, conducted in 2009. Based on that scope, the regional network would comprise 2,177 kilometres worth of railway lines, approximately 180 kilometres of which would connect major transport facilities across the Gulf including ports, airports and industrial zones.

However, since approval of the initial study, plans have been subject to change. By way of illustration, in 2008 it was intended that the railway would connect Bahrain and Qatar via a proposed Qatar-Bahrain causeway. That crossing was put on hold in 2010.

Further, this month the UAE’s Etihad Rail is rumoured to have decided to drop the link to Al-Ain on the Omani border, which was planned to form part of Phase 2 of the UAE national rail project. Such changes may comprise one of several challenges ahead.

Notwithstanding changes in connections between countries, the basic strategy for project delivery is agreed. Each participating GCC member state will be responsible for the construction work relating to the individual sections of the railway falling within its border, before the common stations, branches and freight terminals to supply the main network.

The overall capital investment cost for the mixed passenger and freight service railway could, it is said, reach figures of up to USD 200 billion. The member states intend to share that cost in proportion to the length of the main line in each country. The aspiration is for the cost of the rolling stock, and operation and maintenance to be borne by the private sector, although time will tell whether this is the reality.

With a target operational date set for 2018, and a series of technical, geological and regulatory obstacles to surmount, the participating GCC nations have resolved to set about delivering an ambitious project which could propel them to the forefront of the rail industry practice.

Progress to date

The detailed engineering design work is nearing completion this year and it is understood that approximately 400 kilometres of track is already under construction / constructed.

Each of the GCC governments is planning or implementing freight and passenger railway infrastructure as part of their individual transport master plans. Those plans include the long distance lines which are intended to form part of the GCC Railway, and other urban rail projects that are additional to the common railway.

The UAE and KSA are the leaders in rail investment, having made significant headway with the practical steps required to implement the project.

At the forefront of this progress is the Etihad Rail Network. Etihad Rail released invitations to tender for Phase 2 of the UAE’s federal railway project in 2012. The project objective is to link the seven Emirates of the UAE by freight and passenger rail. Phase 2 was previously planned to extend the existing network to the KSA border via Ghweifat in the west, and the Omani border via Al Ain in the east, forming a vital part of the GCC Railway.

As noted above, Etihad Rail is rumoured to have recently decided to omit the section of the track linking Al Ain to Oman. It is also reported that there may also be plans to drop the previously planned branch line between Mussafah and Industrial City Abu Dhabi. The impact of any such action on the future of the GCC Railway is, at present, unknown.

KSA is also an active player, with significant lengths of mainline track already functioning through its terrain. The Saudi Railway Company Project (previously the North-South Railway line) is expected to expand the existing rail network to accommodate a 2,400 kilometre freight and passenger line running from Riyadh to Al Haditha, with extensions to Hazm Al-Jalamid and Ras Al Khair, all of which will comprise part of the GCC Railway.

KSA’s second major scheme, the east-west Saudi Landbridge Project, is intended to deliver an industrial rail link that is interoperable with the Saudi Railway Company Project and connects Dammam with Jeddah via Riyadh. The Saudi Railway Company plans to increase capacity of this freight line, create a passenger service and upgrade infrastructure / rolling stock to agreed regional GCC Railway standards.

The remaining GCC partners have initiated projects for sections of track which it is anticipated will in time be connected to the GCC Railway. Such projects include Qatar Rail Company’s long-distance freight line (part of the Qatar Integrated Rail Programme), a new Bahrain causeway, the Oman Railway Company’s USD$ 15 billion rail network and the Kuwait Ministry of Communication’s planned national rail network.

Plans also exist to extend the GCC Railway, in due course, to the Yemen border, and potentially beyond to other destinations including Jordan, Iraq, Syria and Turkey.

Benefits

The GCC Railway is intended to bring with it a raft of immediate and long term benefits.

Reduced travel time will result from passengers no longer being subject to customs checks at every border. Instead, passports and goods will only be checked in at the destination country. A reliable and faster freight transport system will mean shorter delivery lead times and greater supply chain efficiency. This also assists with the logistics of exploiting the Gulf’s natural resources, such as phosphate and other minerals in Saudi Arabia.

The project is expected to generate employment opportunities for local workers, companies and rail service providers, and as travel becomes more accessible, establish free movement of labour between member states. The intention is therefore that it serves to strengthen social and economic integration within and amongst the GCC member states.

The railway promises a safe alternative to sea trading import/export routes currently blighted by piracy which presents a threat to any supply chain of the Arabian Gulf.

These factors are intended to work together to stimulate intra-regional trade. That should improve competitiveness and strengthen the investment environment, which, in turn, supports the development of export trading.

In short, the GCC Railway is expected to be an enabler for diversifying non-oil economies and thus a critical driver of sustainable growth for the GCC at a national and regional level. It represents a GCC-wide commitment to delivering permanent improvement of regional transport infrastructure and services for the greater good.

Compare jurisdictions: Corporate Governance

"Lexology is a good barometer of a firm's expertise as the articles showcase a firm's understanding of the issues involved and how up to date their knowledge is. It's a good one stop solution where one is able to view the same law/cases from different perspectives; on the whole I would rate Lexology as a good service."